Diminishing marginal utility refers to defining right action in terms of maximization of happiness subsequent units of good yielding less pleasure human flourishing or well-being other people taking your happiness away
Added by Chase T.
Step 1
Step 1: Understand the concept of "marginal utility," which refers to the additional satisfaction or pleasure gained from consuming one more unit of a good or service. Show more…
Show all steps
Your feedback will help us improve your experience
Jennifer Stoner and 59 other Microeconomics educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Key Concepts
Recommended Videos
Define diminishing marginal utility.
The law of diminishing marginal utility states that as an individual increases consumption of a given product within a set period of time, the utility gained from consumption eventually declines. Marginal utility measures the added satisfaction derived from a one-unit increase in consumption, holding consumption of other goods and services constant. When goods are relatively scarce, the law of diminishing marginal utility means that the added value of another unit of goods will be small in relation to the added value of another unit of services. The law of diminishing marginal utility gives rise to a downward-sloping demand curve for all goods and services.
Crystal W.
The law of diminishing marginal utility says that, as a person consumes more and more of a certain good, the addition to total satisfaction decreases: person's income increases, the satisfaction associated with each dollar spent decreases, as a person consumes more and more of a certain good, the additional satisfaction increases as a person's income increases, the satisfaction associated with each additional dollar earned increases
Kevin C.
Recommended Textbooks
Principles of Economics
Principles of Microeconomics for AP® Courses
Economics
Transcript
18,000,000+
Students on Numerade
Trusted by students at 8,000+ universities
Watch the video solution with this free unlock.
EMAIL
PASSWORD